SAP: Business ByDesign will be smash success

Vendor pushed SMB ERP suite

A top SAP executive says the vendor's Business ByDesign on-demand ERP suite for SMBs will take "the world by storm" one day, but declined to reveal when a long-anticipated broader release will occur.

SAP initially announced the suite in late 2007, and predicted it would generate US$1 billion in revenue by 2010. But it subsequently limited the rollout to a handful of markets while working to make sure the software as a service application will be profitable enough at scale.

In remarks at the Citigroup Global Technology Conference in New York this month, SAP executive board member Bill McDermott set high expectations for the application once that goal is accomplished.

"When this product hits the market, we won't have to do a lot of talking," he said. "The product and market will do the talking for us."

While SAP has publicly showcased Business ByDesign and even released a number of updates, executives have been circumspect about when it will be generally available, leading to speculation about its eventual fate.

The market "will see a lot more" about the application in 2010 and beyond, McDermott said, but offered no other specifics. He has made similar statements in the past.

Business ByDesign includes a broad array of functionality, from supply chain management (SCM) to financials and built-in analytics.

At present, the application's feature set is strong, but SAP also has to figure out how to avoid cannibalising sales from its existing on-premise SMB software suites, said Ray Wang, a partner with the analyst firm Altimeter Group.

In addition, SAP has "a limited window" in which to execute a broader launch of the product, given that competitors such as NetSuite and Epicor are already in the SaaS ERP game, he said.

"And these are the guys who are SMB by DNA," he added. "They're going to have a head start."

That said, "SAP's advantage is it's got a brand name. SAP will always be considered in a short list, because it's SAP," Wang said.

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Tags SAPSpecial IDbusinessbydesign

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